The circular flow model is used to show the

Question

Quizplus · Accepted Answer

The circular flow model is used to illustrate the flow of money and goods and services in the economy, showing how expenditures and incomes reciprocally affect each other. Option A is incorrect because the circular flow model does not reflect economic expansions and contractions, but rather serves as a representation of ongoing economic activity. Option C is incorrect because it places too much emphasis on supply and demand, and not enough on the interplay between expenditures and incomes. Options D and E are irrelevant to the circular flow model.

The Circular Flow Model Is Used to Show the